(b) Termination by WESTERN of licenses and rights granted to the CORPORATION shall terminate the obligations of the CORPORATION under the provisions of Articles IV and V relating to such terminated licenses and rights, except such obligations as to ROYALTY-BEARING PRODUCTS made, sold, leased or put into use prior to such termination.

6.04 (a) By written notice to WESTERN, the CORPORATION may cancel the licenses for any specified products granted hereunder to it under WESTERN'S PATENTS. Such cancellation shall be effective as of the date of giving said notice but shall not relieve the CORPORATION of its obligation to pay accrued royalties with respect to such specified products.

(b) By written notice to the CORPORATION, WESTERN or AT&T may cancel the licenses for any specified products granted hereunder to it under the CORPORATION'S PATENTS, such cancellation to be effective as of the date of giving said notice. 6.05 By written notice to WESTERN, specifying any of WESTERN'S PATENTS by number and date of issuance, the CORPORATION may surrender and terminate all licenses and rights granted to it under such specified patent or patents or under any specified invention or inventions thereof. Such surrender and termination shall be effective as of a date specified in said notice which shall not be more than six (6) months prior to the date of giving said notice. As of said effective date, such specified patent or patents or invention or inventions shall cease to be among, or among the inventions of, WESTERN'S PATENTS for the purposes of this agreement without affecting obligations in respect of royalties accrued prior to said effective date.

6.06 (a) Every sublicense granted by a party or AT&T shall terminate with termination or cancellation of its corresponding license.

(b) Any sublicenses granted shall terminate if and when the grantee thereof ceases to be an ASSOCIATED COMPANY of WESTERN or AT&T or a SUBSIDIARY of the CORPORATION. Each LICENSED PRODUCT and each maintenance part, made by or for a SUBSIDIARY of the CORPORATION, and on which royalty has accrued but which remains not sold, leased or put into use at the time such SUBSIDIARY ceases to be a SUBSIDIARY of the CORPORATION, shall be deemed to have been put into use by such SUBSIDIARY immediately prior to such time at the place said LICENSED PRODUCT or part is then located.

(c) If an ASSOCIATED COMPANY'S relationship to a party or AT&T changes so that such ASSOCIATED COMPANY is no longer an ASSOCIATED COMPANY of such party or AT&T, licenses and rights ac

quired under the patents and patent rights of such ASSOCIATED COMPANY for inventions made prior to the date such relationship changed shall not be affected by such change.

6.07 Licenses, immunities and rights with respect to each LICENSED PRODUCT, and each maintenance part, made, sold, leased or put into use prior to any termination or cancellation under the provisions of this Article VI shall survive such termination or cancellation.

ARTICLE VII-MISCELLANEOUS PROVISIONS

7.01 With respect to patents or inventions owned jointly by the CORPORATION, or any of its ASSOCIATED COMPANIES, with any other person or persons who has or have granted, or who shall hereafter grant, to WESTERN or AT&T, licenses or other rights thereunder, the CORPORATION, to the extent that the licenses and rights so granted do not exceed the scope of the licenses and rights herein granted by the CORPORATION, consents to the grant of licenses and rights to WESTERN and AT&T under such patents and inventions by such other person or persons.

7.02 (a) Each party shall, upon written request from the other party sufficiently identifying any patent by country, number and date of issuance, inform the other party as to the extent to which any such patent is subject to the licenses, immunities and rights granted to such other party.

(b) If such licenses, immunities or rights under any such patent are restricted in scope, copies of all pertinent provisions of any contract (other than provisions of a contract with a government to the extent that disclosure thereof is prohibited under that government's laws or regulations) creating such restrictions shall, upon request, be furnished to the party making such request.

7.03 Upon written request from one party, the other party shall inform the requesting party which of said other party's patents cover inventions under which the United States Government holds a royaltyfree license.

7.04 (a) Nothing contained in this agreement shall be construed as:

(i) Requiring the filing of any patent application, the securing of any patent or the maintaining of any patent in force; or

(ii) A warranty or representation by any grantor as to the validity or scope of any patent; or

(iii) A warranty or representation that any manufacture, sale, lease, use or importation will be free from infringement of patents other than those under which and to the extent to which licenses or immunities are in force hereunder; or

(iv) An agreement to bring or prosecute actions or suits against third parties for infringement; or

(v) An obligation to furnish any manufacturing or technical information or assistance; or

(vi) Conferring any right to use, in advertising, publicity or otherwise, any name, trade name or trademark, or any contraction, abbreviation or simulation thereof; or

(vii) Conferring by implication, estoppel or otherwise upon any grantee any license or other right under any patent, except the licenses and rights expressly granted to such grantee; or

(viii) An obligation upon any grantor to make any determination as to the applicability of any patent to any product of any grantee or any of its ASSOCIATED COMPANIES; or

(ix) A release for any infringement prior to the effective date hereof.

(b) Neither party nor AT&T makes any representations, extends any warranties of any kind or assumes any responsibility whatever with respect to the manufacture, sale, lease, use or importation of any LICENSED PRODUCT, or part therefor, by any grantee, any of its ASSOCIATED COMPANIES, or any direct or indirect supplier or vendee or other transferee of any such company, other than the licenses, immunities, rights and warranties expressly herein granted.

7.05 Neither this agreement nor any licenses or rights hereunder, in whole or in part, shall be assignable or otherwise transferable.

7.06 Any notice, request or information shall be deemed to be sufficently given when sent by registered mail addressed to the addressee at its office above specified (and when addressed to WESTERN, to the attention of its Patent Licensing Organization) and any royalty statement shall be deemed to be sufficiently furnished when sent by registered mail addressed to WESTERN'S Treasury Organization at 222 Broadway, New York, New York 10038, or at such changed address as the addressee shall have specified by written notice.

7.07 This agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them and neither of the parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein, or in any prior existing written agreement between the parties, or as duly set forth on or subsequent to the effective date hereof in writing and signed by a proper and duly authorized representative of the party to be bound thereby.

GENERAL DEFINITIONS APPENDIX ASSOCIATED COMPANIES of AT&T are The Southern New England Telephone Company, a Connecticut corporation, and its SUBSIDIARIES, Cincinnati Bell Inc., an Ohio corporation, and its SUBSIDIARIES, and SUBSIDIARIES of AT&T other than WESTERN and its SUBSIDIARIES.

ASSOCIATED COMPANIES of the CORPORATION are SUBSIDIARIES of the CORPORATION, companies presently having the CORPORATION as a SUBSIDIARY and other SUBSIDIARIES of such companies.

ASSOCIATED COMPANIES of WESTERN are SUBSIDIARIES of WESTERN.

The CORPORATION'S PATENTS means all patents issued at any time in the United States for:

(i) Inventions made prior to the termination of the FIVE YEAR PERIOD and owned or controlled at any time during the FIVE YEAR PERIOD by the CORPORATION or any of its ASSOCIATED COMPANIES,

(ii) Inventions made during the FIVE YEAR PERIOD, solely or jointly with anyone, and in the course of their employment by employees of any such company who are employed to do research, development or other inventive work, and

(iii) Any other inventions made prior to the termination of the FIVE YEAR PERIOD, with respect to which and to

the extent to which any such company shall at any time during the FIVE YEAR PERIOD have the right to grant the licenses and rights which are herein granted by the CORPORATION.

FAIR MARKET VALUE means the NET SELLING PRICE which the CORPORATION or any of its SUBSIDIARIES, whichever effects the sale, lease or use of the product or maintenance part, would realize from an unaffiliated buyer in an arm's length sale of an identical product or maintenance part in the same quantity and at the same time and place as such sale, lease or use.

FIVE YEAR PERIOD means the period commencing on the effective date of this agreement and having a duration of five years.

LICENSED PRODUCT means, as to any respective grantee,

(i) any product as such, or

(ii) any product which is any specified combination.

of the kinds listed in section 2.01 or 2.02 of this agreement. Although the term does not mean, and although licenses are not granted for, any other combination, a LICENSED PRODUCT

(iii) shall not lose its status as such on account of, and

(iv) shall not cause an unlicensed combination to infringe the grantor's patents (i.e., WESTERN'S PATENTS or the CORPORATION'S PATENTS, as the case may be) solely on account of, such LICENSED PRODUCT being made, sold, leased or put into use as part of an unlicensed combination.

NET SELLING PRICE means the gross selling price of the ROYALTY-BEARING PRODUCT in the form in which it is sold, whether or not assembled (and without excluding therefrom any components or subassemblies thereof, whatever their origin and whether or not patent impacted), less the following items but only insofar as they pertain to the sale of such ROYALTYBEARING PRODUCT by the CORPORATION or any of its SUBSIDIARIES and are included in such gross selling price:

(i) Usual trade discounts actually allowed (other than cash discounts, advertising allowances, or fees or commissions to any employees of the CORPORATION, a SUBSIDIARY of the CORPORATION, a company of which the CORPORATION is a SUBSIDIARY at the time of the sale, or any other SUBSIDIARY of a company of which the CORPORATION is a SUBSIDIARY at the time of such sale); (ii) Packing costs;

(iii) Import, export, excise and sales taxes, and customs duties;

(iv) Costs of insurance and transportation from the place of manufacture to the customer's premises or point of installation;

(v) Costs of installation at the place of use; and

(vi) Costs of special engineering services not incident to the design or manufacture of the ROYALTY-BEARING PRODUCT. ROYALTY-BEARING PRODUCT means any LICENSED PRODUCT of the kinds specified in section 2.01 of this agreement (other than any LICENSED PRODUCT for which all the licenses granted in this agreement are at a royalty rate of zero percent (0%)), and any maintenance part therefor,

(i) Which upon manufacture includes, or the manufacture of which employs, any invention of any of WESTERN'S PATENTS in force at the time and place of such manufacture, or

(ii) Which includes when sold, leased or put into use, or the use of which employs, any invention of any of WESTERN'S PATENTS in force at the time and place of such sale, lease or use,

other than:

(iii) Inventions under which the United States Government holds a royalty-free license if such LICENSED PRODUCT or part is contracted for, directly or indirectly, by the United States Government, or by another national government with funds derived through the Military Assistance Program or otherwise through the United States Government, and

(iv) Inventions employed in the manufacture of, or included in, such LICENSED PRODUCT or any original part thereof, or such maintenance part therefor or any original part thereof, by a direct or indirect supplier of the CORPORATION or any of its SUBSIDIARIES, but only to the extent such supplier has exercised its own licenses granted by WESTERN under patents for such inventions to so employ or include said inventions.

SUBSIDIARY means a company the majority of whose stock entitled to vote for election of directors is now or hereafter controlled by the parent company either directly or indirectly, but any such company shall be deemed to be a SUBSIDIARY only so long as such control exists.

WESTERN'S PATENTS means all patents issued at any time in the United States for:

(i) Inventions made prior to the termination of the FIVE YEAR PERIOD and owned or controlled at any time during the FIVE YEAR PERIOD by AT&T, WESTERN or any of their SUBSIDIARIES,

(ii) Inventions made during the FIVE YEAR PERIOD, solely or jointly with anyone, and in the course of their employment by employees of any such company who are employed to do research, development or other inventive work, and

(iii) Any other inventions made prior to the termination of the FIVE YEAR PERIOD, with respect to which and to the extent to which any such company shall at any time during the FIVE YEAR PERIOD have the right to grant the licenses and rights which are herein granted by WESTERN;

provided, however, that said patents do not include those issued for inventions made by employees of any SUBSIDIARY of WESTERN or AT&T exclusively engaged in the performance of contracts with the Energy Research and Development Administration of the United States.

§ 68.506 Configurations used to connect multi-line communications systems such as Private Branch Exchange (PBX) and key telephone systems.

Any of the jack configurations specified in § 68.502, used singly, in multiple combinations, or combined in common mechanical arrays, may be used as the interface between multiline equipment such as PBX and key telephone systems, and the telephone network. The telephone company and installation supervisor may mutually agree to use electrical connections alternative to those specified in § 68.502. [43 FR 16501, Apr. 19, 1978]

69.409

License contract expenses.

69.410 Other expenses.

Subpart F-Segregation of Common Line
Element Revenue Requirement

69.501

General.

69.502 Base factor allocation.

Subpart G-Exchange Carrier Association

69.601

Exchange carrier association.

69.602 Board of directors.

69.603

Association functions.

69.604 Billing and collection of access charges.

69.605 Distribution of Carrier Common Line revenues.

69.606 Computation of average schedule company payments.

69.607 Disbursement of Carrier Common Line residue.

69.608 Carrier Common Line hypothetical net balance.

69.609 End User Common Line hypothetical net balances.

For purposes of this part:

(a) "Access Service" includes services and facilities provided for the origination or termination of any interstate or foreign telecommunication;

(b) "Annual revenue requirement" means the sum of the return component and the expense component;

(c) "Association" means the telephone company association described in Subpart G of this part;

(d) "Big 4 Wage Factor" means that ratio of combined wage expense except building maintenance wage expense attributable to general office space in the following expense categories:

(1) Maintenance;

(2) Traffic;

(3) Commercial; and

(4) Revenue Accounting;

(e) "Buildings" includes investment that is described as building investment in the Separations Manual;

(f) "Carrier Outside Plant" or "Carrier OSP" means all outside plant that is not Customer OSP;

(g) "Central Office Equipment" or "COE" includes all equipment or facilities that are described as Central

Office Equipment in the Separations Manual;

(h) "Commerical Expenses" includes all expenses that are described as Commercial Expenses in the Separations Manual, except for any expense incurred in computing, billing or collecting access charges which shall be deemed to be Revenue Accounting expense;

(i) "Current taxes" includes taxes other than property taxes that are actually accrued during the relevant period less credits attributable to past deferrals and does not include hypothetical taxes that are allowable expenses for ratemaking purposes or taxes assessed upon end users;

(j) "Customer Outside Plant" or "Customer OSP" means all lines or trunks on the customer side of a Class 5 or end office switch, including lines or trunks that do not terminate in such a switch, except lines or trunks that connect an interexchange carrier;

(k) A "coinless pay telephone" is a public telephone provided by a telephone company through which an end user may originate interstate or foreign telecommunications for which he pays by credit card, collect, or third number billing procedures;

(1) "Direct Expense" means expenses that are attributable to a particular category of tangible investment described in Subpart D of this part and includes:

(1) Maintenance;

(2) Depreciation and amortization; (3) Rental payments for buildings, facilities or equipment; and

(4) Property taxes;

(m) "End user" means any customer of an interstate or foreign telecommunications service that is not a carrier, except that a carrier shall be deemed to be an "end user" to the extent that such carrier uses a telecommunications service for administrative purposes, without making such service available to others, directly or indirectly;

(n) "Entry switch" means the telephone company switch in which a dedicated transport line or trunk terminates;

(o) "Expense component" means the total expenses and income charges for